More than 300 state housing tenants were evicted in the past year for lying about their circumstances, including one couple that ran an internet business from their property which turned over almost $400,000.

New figures show the number of tenancies ended for dishonesty has been steadily rising over the past few years. In the past year 312 tenants were terminated, up from 241 last year and 114 in 2010.

Two Auckland tenants operated an internet business with 300 residential customers from their state house which generated $393,000 between 2006 and 2010. They have been sentenced to community work and ordered to pay reparation.

In another case a former tenant was ordered by the courts to repay more than $75,000 in rental subsidies because she hadn't declared she had a partner.

Other tenants were evicted for subletting their properties or not declaring employment or assets.

Housing Minister Phil Heatley said a total of 709 houses had been freed up for people on the waiting list.

In the past year, Housing NZ had uncovered $9.6 million in overpaid rent subsidies, taking the total over the past four years to nearly $23.3 million.

"Housing NZ has worked hard to identify and remove tenants committing fraud and to make sure those most in need are assisted for as long as they have that need.

"We have built a very effective and skilled team of investigators who are very good at detecting, investigating and dealing with tenants who are deliberately ripping off the system."

Since July last year, Housing NZ had successfully prosecuted 120 tenants for fraud. Of those, three received jail sentences, 42 received home or community detention, 45 were given community work, five had to pay reparation, four were convicted and discharged and 21 are still awaiting sentencing.